“All Natural” Labeling Class Fails for Lack of Ascertainability of Class Members
In Ault v. J.M. Smucker Co., 310 F.R.D. 59 (S.D.N.Y. 2015), the Southern District of New York denied class certification to a group of consumers who were allegedly misled to purchase certain Crisco oil products labeled “All Natural.”
One of the well-known requisites for class certification is whether the class is “ascertainable.”[1] Pursuant to that standard, an “imprecise class definition, which does not give rise to presently ascertainable class members, undermines judicial economy and efficiency,” making class certification inappropriate.[2]
In May 2013, Adrianna Ault sued J.M. Smucker Co., the owner of the Crisco brand, individually and on behalf of a putative class of potentially millions of members. She alleged that Crisco labels were misleading and deceptive because the corn oil products claimed to be “All Natural,” when, in fact, some of the oils were made using genetically modified organism crops or were heavily processed.
The court denied certification of Ault’s class for multiple reasons. Most significantly, the court ruled that the class was not ascertainable because it was not feasible to identify all members of the class. The class was to include all consumers who had purchased Crisco oil products that bore the “All Natural” label in New York between February 15, 2009, and June 1, 2014, for the Vegetable and Corn Oils, and between June 1, 2010, and June 1, 2014, for the Canola and Natural Blend Oils. The issue, the court found, was that during the relevant time periods, certain oil products bore the “All Natural” label, while others did not. Based upon this subtle difference, the court concluded it would be difficult for any consumer to prove that he or she had indeed purchased an “All Natural” Crisco oil product instead of a regular one within the time specified. The court wondered: “Based on the class definition, therefore, an individual who purchased Crisco Corn Oil in 2009 would be a member of the class, but one who purchased Canola Oil that same year would not. Who could possibly recall that level of detail six years (or more) later?”
Also worthy of note was the court’s determination that Ault could not prove that she or the class was injured, and thus could not state a claim for breach of warranty. The court found that Ault had not proposed a method to calculate any alleged premium paid by the consumers for the “All Natural” products, nor did she present evidence that such a premium existed. In rejecting certification for lack of ascertainability, the court relied heavily on the Southern District of Florida’s decision in Randolph v. J.M. Smucker Co., 303 F.R.D. 679 (S.D. Fla. 2014), which likewise involved several different Crisco products and their labels.
Ault (Second Circuit) and Randolph (Eleventh Circuit) seemingly applied the strict ascertainability standard, outlined by the Third Circuit in Marcus v.BMW of North America LLC, 687 F.3d 583 (3d Cir. 2012) and Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013). The Third Circuit identified several policy concerns for its stringent standard: (1) lessening the administrative burden; (2) protecting absent class members from lack of representation; and (3) protecting defendants’ rights to due process. Under this standard, a plaintiff class must: (1) present a method for identifying class members that is economical and administratively feasible; (2) provide the best notice practicable to class members and screen claims for only those specific to the case; and (3) present a method to prove class membership that would ensure false or fraudulent claims are not made part of the lawsuit.
Practitioners should note, however, that the Seventh Circuit explicitly rejected this logic in its recent opinion, Mullins v. Direct Digital LLC, No. 15-1776, 2015 WL 4546159 (7th Cir. July 28, 2015). The Seventh Circuit noted that the Third Circuit’s reasoning would have the “effect of barring class actions where class treatment is often most needed: in cases involving relatively low-cost goods or services.” And Texas litigants should also be aware that the Fifth Circuit weighed in on the issue earlier this year in Frey v. First Nat’l Bank Southwest, 602 F. App’x 164 (5th Cir. 2015), deciding to certify a class of ATM users. In its opinion, the court noted that its jurisprudence requires a class to be “adequately defined and clearly ascertainable,”[3] but also noted that ascertainability does not have to be possible before certification, but must be possible only “at some stage of the proceeding.”[4] The court found that the class was ascertainable because there was only one ATM location at issue during a defined period of time, and it was possible to identify all of the customers who had used it.
While the Fifth Circuit has not applied the Third Circuit’s heightened standard of ascertainability (yet), companies opposing class certification should seek application of the Third Circuit’s ascertainability test.
[1] Frey v. First Nat. Bank Sw., 602 F. App’x 164, 168 (5th Cir. 2015) (“We have stated that ‘in order to maintain a class action, the class sought to be represented must be adequately defined and clearly ascertainable.’”); Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 403 (Tex. 2000) (“For a class to be sufficiently defined, it must be precise: the class members must be presently ascertainable by reference to objective criteria. This means that the class should not be defined by criteria that are subjective or that require an analysis of the merits of the case.”); see also Fed. R. Civ. P. 23(b)(3); Tex. R. Civ. P. 42.
[2] Intratex Gas Co., 22 S.W.3d at 404.
[3] Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632, 639 (5th Cir. 2012).
[4] William B. Rubenstein, Newberg on Class Actions § 3:3 (5th ed.2011).